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Elite Traveler – ET Insider – November 24, 2009

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ET Insider – November 24, 2009

Elite Traveler Insider –

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November 24, 2009

Elite Traveler Insider

By Douglas D. Gollan, President and Editor-in-Chief, Elite Traveler Magazine  

Welcome to the latest issue of Elite Traveler Insider, the bi-weekly newsletter designed to update our top partners on trends in the private jet lifestyle. This information is provided to offer a better understanding of how to target these globetrotting elite travelers, their impact on your business and other trends that affect you. Remember, private jet travelers are paying up to $10,000 per hour to fly by private jet, so these super rich consumers could be and should be your best customer. We talk about them and how you can get more of them and more from them.

IN THIS ISSUE:

1. Report from IHT Techno Luxury Berlin

2. Private Jet Travel Shows Year-Over-Year Growth

3. Can These Folks Buy Your Product?

4. Unity Marketing: Lasting Change for Mass Affluent

5. Ad Age: The Circulation Crisis Is Behind the Trouble at Conde Nast

Over 90 percent of today’s Super Rich are Self Made and over 80 percent of the Super Rich have made their fortune in the past 10 years. Now is the best time to make sure they know your brand. 86% believe Elite Traveler is a good showcase for luxury products.

1. Report from IHT Techno Luxury Berlin

In a period when luxury has supposedly gone brown bag for consumers who are still partaking (Net-A-Porter CEO Natalie Massenet says the company now sends out unbranded packages), and conspicuous consumption is so yesterday, an all-star cast from the luxury goods industry came to the German capital and spent most of the time talking about how they can use technology to literally open their trench coat to the masses. In fact, Burberry, represented by Creative Director Christopher Bailey, told delegates how a website dedicated to its famous raincoat (artofthetrench.com) had quickly gathered over 700,000 fans on Facebook.

Under the theme Techno Luxury, The International Herald Tribune Fashion Editor Suzy Menkes held her annual conclave of industry elite discussing both how technology is impacting the manufacturing and creative process as well as communication.

Most of what the several hundred delegates at The Ritz-Carlton heard is that when it comes to exposing themselves, luxury brands are years behind the auto and gaming industries in terms of web communications. With the sober exception of Alain Dominique Perrin, Executive Director of Richemont (Cartier, Van Cleef, Vacheron Constantin, IWC, Dunhill, etc.) which can trace history for many of its brands hundreds of years back, it was clear that although late to the show, luxury brands intend to have a front row seat when it comes to using the Internet to communicate.

In fact, in a slide that would have sent S.I. Newhouse to the phones to call back McKinsey (which just completed a massive business review of Conde Nast and the closing of four titles on a single day), Gucci Creative Director Frida Giannini began her presentation with a slide that showed her Age 12 to 24 women’s/girls target spends 94 percent of their media time either on the web or television (split evenly) vs. only 6 percent flipping through fashion magazines or newspapers. The research from web booster Forrester Research was a stern warning that media that can’t prove its audience’s worth through Net Worth, Household Income and Luxury Spending is probably headed for a listing on Magazine Death Pool, a web site that tracks publications with deadly diseases (See Item 3 for New Household Income Reports for fashion titles).

Giannini noted the personal perils of web marketing in that at any one time there were four fake “Frida Giannini” profiles on Facebook, many with updates that resembled some of her normal routines such as “taking my dogs to the beach.”

That said, the Gucci Creative Director reeled off a laundry list of web initiatives designed to create a stronger bond with fans, including a behind the scenes video of Rihanna and Frida going through The Tattoo Heart Collection and recommendations for where to go for various cities, be it shopping or a restaurant tied to Google maps. Among her Twitter entries was “See video from Frida’s trip to New York.”

Giannini, like many others, sees the web as a great opportunity to “make people understand what’s behind the brand” noting 80 percent of its handbags are still made by hand. Interestingly, for her own personal consumption a still-under-40 Giannini told the audience she prefers glossy magazines.

While Natalie Massenet, Founder and Chairman of Net-A-Porter.com bravely predicted a future world where most shopping will take place “at her desk, mobile phone, hotel room or bedroom,” Menkes spoke of “the fun of shopping,” saying a recent trip on a cold British Fall day to the luxury Westfield Mall revealed “a whole mini-world of people having fun and enjoying life.”

So where does the future of luxury cross with technology? Energetic Burberry designer Christopher Bailey noted that for himself and CEO Angela Ahrendts, “technology is something we do (as opposed to) remember to do.” He noted if “fashion is something that should make you dream,” the ability to add video to give more life and tell a deeper behind an ad campaign shoot can be used “to build more of a story behind the clothes.”

Getting feedback from consumers: When the company used Harry Potter star Emma Watson as its current model, he was able to see via Burberry’s Facebook page that her appeal was much broader and global than he had expected. “It makes you think in different ways as you are directing an ad campaign,” he told the audience.

Business of luxury author Uche Okonkwo, Founder of Luxe Corp., chastised luxury brands for “following not leading” consumers on the web. She said, “Last year it was Myspace, next year something else” and that “everybody jumps on a trend…without core objectives.”

She noted how brands that have spent fortunes on image and strict rules of engagement in the real world have “me too text communication” on Twitter.

Countering the web euphoria, Dominique Perrin of Richemont called for a more measured view giving an example of how his company in the early 1990s pulled its impressive brands out of the massive Basel Watch & Jewelry Fair and created its own “invitation only exclusive” show Salon Haute Horlogerie (SIHH) so its brands weren’t “mixed with the cats and dogs.” The outgoing CEO was recently quoted as saying he would like Richemont to tighten its distribution to create more exclusive.

Echoing Okokwo’s call to focus on the customer, Perrin said “a true luxury timepiece makes its owner part of the maison. Technology is merely another element that includes history, style and craftsmanship. For 300 years technology has confronted the watch industry,” he noted.

Can something be exclusive and open to the world on the web? Independent watchmaker Max Busser, Founder and CEO of MB&F, told the audience that for small players the web is a game changer. “We wouldn’t be here otherwise,” he claimed, saying the Internet has given him and companies like his the ability to communicate directly to the customer, and enable customers to come to his site and endorse the brand, a notable feat when your product routinely sells in the six figure range.

On the practical side, Tomas Meier, Creative Director of Bottega Veneta spoke about how laser cutting of leather made it possible for artisans to then hand weave the strips together, still making each item unique to a particular craftsman.

Getting Targeted: Perry Oosting, the CEO of Vertu talked about providing customized content for its elite owners.

What’s next? Okonkwo clearly laid out the challenge that the leaders of what’s next in fashion need to be more innovative in how they communicate with customers. Or as Dominique Perrin note, the web is only one tool, so the challenge is for luxury companies to do a better job targeting their best and Next Gen customers with a sound strategy.

Out of the Box: Looking for new and innovative ways to efficiently and cost-effectively target potential customers? Combine the only worldwide audited magazine aboard private jets, Elite Traveler, with an innovative destination specific campaign in private jet terminals, including events, and get to these consumers as they narrow their consideration set through Elitetraveler.com. You can find all the tools you need at www.elitetraveler.com/business.

2. APrivate Jet Travel Shows Year-Over-Year Grow

More good news for luxury marketers who see private jet travelers as a lucrative audience to promote their products and services: Private jet travel is on a clear upswing meaning more wealthy consumers will be potential customers. ARGUS TRAQPak data is serial-number specific aircraft arrival and departure information on all IFR flights in the US (including Alaska and Hawaii). The table below reflects business aircraft activity data for September 1-30, 2009 vs. September 1-30, 2008.

The September results show business aircraft activity at its highest level since October 2008. TRAQPak data indicates that September private aircraft activity increased 2.7% from August 2009.

et_graph

While the world’s economy today is unsteady, one thing is for sure: The wealthy consumers flying aboard private jets are your best bet, and only Elite Traveler delivers these elite travelers to our advertisers through our BPA audited circulation aboard private jets in over 100 countries, including Russia, the UAE, Kuwait, Qatar, Bahrain, Oman, India, Singapore, Korea and China. All with one ad buy!

3. Can These Folks Buy Your Product?

Can your readers really buy my product? That’s the question more luxury marketers are asking media. And if the latest Household Incomes reported in WWD and sourced to Mediamark Research are an indication, Mass Affluent glossy and fashion titles are in for some more pain.

With consumers less likely to be able to charge on already maxed out credit cards and few new credit cards being offered, Household Income has become a critical measure. Reporting Pre-Tax Household Income, Elle led the way, with Household Income among women at $77,292, according to Mediamark Research and Intelligence’s new fall report. Harper’s Bazaar was right behind Elle at $69,089, followed by Vogue at $68,143, while Cosmopolitan was $61,232. InStyle reported a 4 percent gain to $84,112, Allure’s household income rose 3.3 percent to $65,677, and Glamour and Lucky were both down 2.5 percent to $67,555 and $82,732, respectively. Meanwhile, a few titles reported modest declines in household income, with W down 7.7 percent to $81,816. Town & Country fell 7.4 percent to $60,193 and Marie Claire posted a 5 percent decline, to $74,116, according to WWD.

Only Elite Traveler can guarantee you that your ad dollars are reaching wealthy consumers who are still spending. What do we mean? Our new June 2009 BPA Circulation statement breaks out where our magazine goes – 71 percent of our copies to private jets and private jet terminals, 14 percent to First Class lounges, 3 percent go to Sport Locker Room/Training Facilities and Yachts, etc. This means you know that your dollars are getting to consumers who are still traveling in style, and still spending money – not sitting home worried about the economy. It is a guarantee that your critical advertising dollars are reaching a lucrative target. It is a guarantee no other publisher can provide.

4. Unity Marketing: Lasting Change for Mass Affluent

According to today’s Wall Street Journal, “The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery.”

The continued difficult outlook means luxury brands are going to have continued difficulty generating sales from the Mass Affluent and a new report from Unity Marketing endorses that thesis.

Titled “A Study of the ‘New Normal’ Luxury Consumer Market After the Recession,” the report is based upon 2,049 Mass Affluent luxury consumers (average income $196,974). Think consumers similar to readers of Robb Report and Departures, or even a level above W, Town & Country, Condé Nast Traveler and the like.

According to the report, among the key findings that signal a profound and lasting change in the attitudes of affluent consumers regarding their luxury lifestyles:

“For most affluents, luxury is best enjoyed as an occasional pleasure, rather than part of one’s everyday life experience, as 80 percent of those surveyed agreed, ‘I’ve been lucky to enjoy certain luxuries in my life, but luxury is not a part of my lifestyle.'”

Significantly a cultural shift is taking place among the Mass Affluent away from luxury indulgence toward a more conscious, careful consumer mindset. The end result will be people unlikely to pay such high prices again for luxury, as half of those surveyed agreed, “Even after the economy improves, people aren’t going to go back to buying luxury like they used to.”

While the world’s economy today is unsteady, one thing is for sure: The wealthy consumers flying aboard private jets are your best bet, and only Elite Traveler delivers these elite travelers to our advertisers through our BPA audited circulation aboard private jets in over 100 countries, including Russia, the UAE, Kuwait, Qatar, Bahrain, Oman, India, Singapore, Korea and China. All with one ad buy!

5. Ad Age: The Circulation Crisis Is Behind the Trouble at Condé Nast

No doubt like its readers, Condé Nast is reeling. Media columnists have been going to town detailing the daily layoffs at various titles with hints of more to come. While Elite Traveler has actively developed multiple media platforms to reach our target audience – Very Rich folks who fly by Private Jet – through Elite Traveler, Luxus Private Jet Terminal Advertising, Luxus Private Jet Terminal Events, Elitetraveler.com, Luxus Collateral Distribution in private jet terminals and some other vehicles, our circulation focus has always fortunately been “less is more” and “quality over quantity.” In any case, below is an excerpt from an Advertising Age article I found of interest:

“Why didn’t Condé try harder to save Gourmet, perhaps by changing its business model? Maybe it could have hiked the subscription price — each issue only brought Condé revenue of $1.18, the circulation expert Jack Hanrahan pointed out — and reduced circulation to become more like Cook’s Illustrated, which doesn’t accept advertising. That would have gotten around the conflict with Condé sibling Bon Appétit, something the company cited in closing Gourmet.

Other publishers have reaped millions of dollars through licensing their brands, but Mr. Newhouse wants his employees focused on keeping the magazines great. Higher subscription rates might improve circulation profitability, alternately, but Condé prefers to attract advertisers with big subscriber bases paying not very much.

“It’d be one thing if they killed 10 magazines and said, ‘We have this amazing vision for the future and we’re putting this money behind this,” the former publisher added. “But you get the sense that this money goes toward shoring up some of the others.”

The company’s circulation strategy is common around the industry. But the challenges have spurred some titles to try raising subscription prices in a bid for better circulation returns and a more-defined audience. Condé doesn’t seem to be considering that route.

“I’m kind of surprised that they’re not talking at all about increasing subscription prices,” said an executive at a major marketer that frequently works with Condé. “They’re a company talking about luxury, but they’re out there giving their subscriptions away, and their revenue model doesn’t work any more. You can’t ask advertisers to cover the costs. That’s why they missed out on the increased spending this year from packaged foods who aren’t willing to pay the premium to be in that environment.”

Out of the Box: Looking for new and innovative ways to efficiently and cost-effectively target potential customers? Combine the only worldwide audited magazine aboard private jets, Elite Traveler, with an innovative destination specific campaign in private jet terminals, including events, and get to these consumers as they narrow their consideration set through Elitetraveler.com. You can find all the tools you need at www.elitetraveler.com/business.

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